Shin Han F & P Inc. v. Canada-Nova Scotia Offshore Petroleum Board, 2013 NSSC 341

Supreme Court of Nova Scotia Citation: Shin Han F & P Inc. v. Canada-Nova Scotia Offshore Petroleum Board , 2013 NSSC 341 Date: 2013-10-10 Docket: Hfx No. 414077 Registry: Halifax Between: Shin Han F & P Inc. Applicant v. Canada-Nova Scotia Offshore Petroleum Board Respondent Judge: The Honourable Justice Gregory M. Warner Heard: October 10, 2013, in Halifax, Nova Scotia Oral Decision October 10, 2013 Written Decision: October 21, 2013 Counsel: Yong Taek Kim , for the Applicant Shin Han F & P Inc.

Raymond Larkin Q.C. , for Canada-Nova Scotia Offshore Petroleum Board By the Court: The Application [ 1 ] Shin Han F & P Inc. (“the Applicant”) has filed a Notice for Judicial Review of a decision by Canada-Nova Scotia Offshore Petroleum Board (“the Board”) made March 5, 2013, to cancel an Exploratory License issued to the Applicant as of January 1, 2009. [ 2 ] The Board has filed the Record of Proceedings and Events, a brief and a book of authorities. [ 3 ] The Applicant, represented by its principal, filed some documents, but not a brief dealing with the legal issues.

Regardless, the Court heard from the Applicant, and has considered and determined the issues contained in the Notice for Judicial Review according to Civil Procedure Rule 7 and the case-law. [ 4 ] By judicial review, the Court is not granted an inherent, unlimited discretion to re-determine decisions made by an administrative tribunal.

[ 5 ] The Canada-Nova Scotia Offshore Petroleum Board is a statutory creation. It is a regime created pursuant to concurrent Federal and Provincial legislation made for the purpose of managing the exploration and development of petroleum resources off the coast of Nova Scotia. Similar regimes exist between the Government of Canada and other Provinces with off-shore petroleum resources. [ 6 ] At the hearing of this application I reviewed with Mr. Kim, paragraph by paragraph, the 22-paragraph Statement of Facts set out in

Part I of the Respondent’s Brief. The Applicant does not take issue with any of these facts. These facts form the basis of the Court’s review. [ 7 ] Based on my reading of the three-volume Record for Judicial Review, I am satisfied that the Statement of Facts in

Part I of the Board’s Brief fairly sets out the relevant facts for the purpose of this Judicial Review Application. [ 8 ] This is an oral decision. I may release it in written form.

For that purpose, I may make grammatical or compositional improvements without changing any reasons or determinations. [ 9 ] The Board is a body established by Federal and Provincial legislation that jointly authorizes the Board to regulate the development of petroleum resources in the Nova Scotia offshore area, as defined in both Acts . [ 10 ] The Applicant held an exploratory license issued by the Board, which conferred the right to explore for petroleum resources in a portion of the Nova Scotia offshore area. [ 11 ] On March 5, 2013, the Board cancelled the Applicant’s Exploration License because it failed to meet certain conditions in the license.

In this Application for Judicial Review, the Applicant is challenging that decision. The Facts [ 12 ] On June 25, 2008, the Board issued a call for bids for exploration licenses for two parcels of offshore lands, including a parcel in the western region of the Scotian Basin, 275 kilometres southwest of Sable Island.

Bidding for each parcel was based solely on the amount of money proposed for expenditure on exploration, research and development, as well as education and training (the “Work Expenditure Bid”). [ 13 ] The call for bids included a requirement that the successful bidder deposit 25% of its Work Expenditure Bid as security for the performance of work by no later than the third anniversary of the license. Failure to post this deposit (the “Work Deposit”) would result in the cancellation of the license.

The Work Deposit was refundable based on expenditures being made on exploration for petroleum in the area covered by the license. [ 14 ] The Applicant was the successful bidder for one of the available parcels, based on its Work Expenditure Bid of $129,000,000.00. The Board issued Exploration License No. 2420 (“the License”) to the Applicant effective January 1, 2009, conferring the right to explore, drill and test for petroleum in the parcel covered by the License. [ 15 ] The License included provisions relating to the Work Deposit. Paragraphs 4(

b) and 5(

a) of the License provide as follows: 4. License Deposit (

b) In the event that the Work Deposit is not posted by the third anniversary of this License, the License Deposit will be forfeited and this License cancelled. 5. Work Deposit (

a) The total Work Deposit required to be posted as security for the performance of work is 25% of the Work Expenditure Bid as set out in

Schedule A (the “Work Deposit”). The Work Deposit is required to be posted no later than the third anniversary of the License. No interest will be paid on the Work Deposit. Failure to post the Work Deposit as security for the performance of the work will result in the cancellation of this License and forfeiture of the License Deposit. [ 16 ] On January 27, 2011, the Board wrote to the Applicant that it had adopted a ‘Work Deposit Deferral Policy’ for current exploration licenses.

The Board noted that, in accordance with the terms and conditions of the License, the Work Deposit was required to be posted on December 31, 2011. The Work Deposit Deferral Policy identified the criteria that would be considered by the Board should the holder of an exploration license apply for a Work Deposit deferral.

The policy required an application for a deferral to be made at least 120 days before the last date that the Work Deposit was required to be made. [ 17 ] No request for a Work Deposit Deferral was received by the Board within the time required in the Policy and on October 28, 2011, the Board wrote to the Applicant stating as follows: In accordance with the terms and conditions of EL 2420, Shin Han F&P is required to post 25% for the Work Expenditure Bid as security for the performance of work by no later than the third anniversary of the license. This deposit is referred to as the Work Deposit.

Failure to post the Work Deposit as security for the performance of work will result in the cancellation of the license. Your License Deposit, in the amount of $50,000.00 was posted as a condition of the issues of Exploration License 2420. This deposit will be refunded in full upon posting of the Work Deposit. In the event that the Work Deposit is not posted on or before January 1, 2012, the License Deposit will be forfeited. The Work Expenditure Bid for EL 2420 was $129,000,000.00. There are no approved Allowable Expenditures to offset the Work Deposit for EL 2420.

A Work Deposit, in the amount of $32,250,000.00 is required to be posted on or before January 1, 2012. [ 18 ] On December 15, 2011, two weeks before the due date for the Work Deposit, the Applicant wrote to the Board making a

request for an extension of its License. [ 19 ] On December 21, 2011, the Board responded to the Applicant’s extension request stating as follows: I am writing in response to the letter received from James R. Gogan of Breton Law Group on December 15 th , 2011. While this letter refers to an extension of Exploration License 2420, we take this to be a request to defer the posting of the required work deposit for a period of six to twelve months. The Board has considered the information provided by Shin Han F&P and has decided that a deferral will not be granted.

The current Work Deposit Deferral Policy, which has been posted on the Board’s website since January 26 th , 2011 and which was sent to you with our letter of January 27 th , 2011, identifies the criteria and conditions that will be considered by the Board if companies holding ELs apply for a Work Deposit Deferral. Upon review of your request, it was determined that it is not in accordance with the Board’s published Work Deposit Deferral Policy.

In accordance with the terms and conditions of EL 2420, Shin Han F&P is required to post 25% of the Work Expenditure Bid as security for the performance of work by no later than the third anniversary of the license. This Work Deposit, in the amount of $32,250,000.00 is required to be posted on or before January 1 st , 2012, as indicated in our reminder letter of October 28 th , 2011. Failure to post the Work Deposit as security for the performance or work will result in the cancellation of the license pursuant to paragraph 4(

b) of the exploration license and in accordance with the Accord Acts. [ 20 ] The Applicant did not make the required Work Deposit by the third anniversary of its License. [ 21 ] On January 8, 2012, the Board wrote to the Applicant noting that the Work Deposit had not been posted as required and giving notice under s. 126 of the Federal Act (s. 125 of the Provincial Act ) requiring compliance within 90 days of the date of the notice. The letter included the following: This letter serves as notice that Shin Han F&P Inc. must comply with sections 4(

b) and 5(

a) of EL 2420 within ninety days (90) after the date of this notice. Failure to comply by this deadline will result in the cancellation of EL 2420 and the forfeiture of the $50,000 License Deposit posted by EL 2420. [ 22 ] On April 20, 2012, the Applicant made a request to the Board for an extension of time to post its Work Deposit. On May 14, 2012, the Board rejected this request. [ 23 ] On April 25, 2012, the Board gave “Notice of Proposed Decision”, which included the following passages: 1.

Description of Proposed Decision Pursuant to subsection 126(2) of the C-NSOPRAIA and subsection 125(2) of the C-NSOPRAI(NS)A, the Board proposes to cancel Exploration License (EL) 2420 because of the interest owner has failed to meet the requirements of

section 4(

b) and 5(

a) of EL 2420. The interest owner of EL 2420 did not comply within ninety days after the January 18, 2012 compliance notice from the Board. [ 24 ] On May 31, 2012, the Applicant requested a hearing on the proposed decision before the Oil and Gas Committee (“the Committee”) in accordance with s. 127(3) of the Federal Act (s. 126(3) of the Nova Scotia Act ). [ 25 ] On June 22, 2012, the Board referred the Applicant’s request for a hearing to the Committee, and directed the Committee to conduct a hearing on the proposed decision. [ 26 ] After hearing the parties, the Committee issued a report.

It first addressed a preliminary issue, which it stated as follows: It is for the Committee to assess the correctness of, review or make recommendations upon the decisions of the Board refusing deferral of this license holder’s Work Deposit?

On this issue, the Committee concluded as follows: On the issue of the Committee’s jurisdiction, the Committee has determined that the only matter before it is this Proposed Decision of the Board: Pursuant to subsection 126(2) of the C-NSOPRAIA and subsection 124(2) of the C-NSOPEAI(NS)A), the Board proposed to cancel Exploration License (EL) 2420 because of the interest owner has failed to meet the requirements of

section 4(

b) and 6(

a) of EL 2420. the interest owner of EL 2420 did not comply within ninety days after the January 18, 2012 compliance notice from the Board. [ 27 ] On the merits of the matter referred to the Committee, it made the following recommendation: The Oil and Gas Committee recommends that the Board adopt and implement its Proposed Decision which reads as follows: The Oil and Gas Committee recommends that the Board adopt and implement its Proposed Decision which reads as follows: Pursuant to subsection 126(2) of the C-NSOPRAI and subsection 124(2) of the C-NSOPRAI(NS)A, the Board proposed to cancel Exploration License (EL) 2420 because the interest owner has failed to meet the requirements of

section 4(

b) and 5(

a) of EL 2420. The interest owner of EL 2420 did not comply within ninety days after the January 18, 2012 compliance notice from the Board. [ 28 ] The Committee found that the Applicant had failed to comply with the condition in the License that it post a Work Deposit of 32.25 million dollars by January 1, 2012, and recommended that the Board implement its proposed decision.

[ 29 ] The Committee concluded its reasons for its recommendation with the following comments: Looked at in this context, it is not difficult to understand the Board’s assertions that acceding to this request would: • Lead to similar requests from other license holders, to which, on the basis of consistency, the Board would have to accede; • Undermine the confidence in the land tenure system; and • Impeded the exploration of petroleum in the Nova Scotia Offshore Area. Even if the Committee’s jurisdiction were unlimited, the Committee’s recommendation would be to cancel EL 2420 and refuse a deferral.

But it is worth noting, again, that the Committee acknowledges its lack of jurisdiction over earlier decisions of the Board relating to work deposit deferral requests. The license holder has not explained how it would be possible not to cancel the license without granting a de facto deferral of the Work Deposit. Granting of a deferral of any kind would be contrary to the prior decisions of the Board which are beyond the authority of this Committee to review. Taking all of this into account, the Committee has no doubt about it decision.

The Committee recommends that the Board adopt and proceed to implement its Proposed Decision which for convenience we reproduce again . . . [ 30 ] On January 30, 2013, the Board reviewed the Committee’s report and considered its recommendations. The Board then decided to make an order cancelling the License and forfeiting the Applicant’s $50,000.00 License Deposit because of its failure to comply with paras 4(

b) and 5(

a) of the License. The Board’s minutes indicate the following: The Board members all agreed that if EL 2420 was not cancelled because of the Interest Owner’s failure to post the required work deposit, this would: • Likely lead to similar requests from other license holders, to which, on the basis of consistency, the Board would have to accede; • Undermine confidence in the land tenure system; and • Impede the exploration of petroleum in the Nova Scotia Offshore Area.

There was a consensus amount the Board members that, for the reasons stated in the Committee Report, which the Board accepts and concurred with, the recommendations of the Committee should be accepted. [ 31 ] On March 5, 2013, the Board ordered that the License be cancelled and that the $50,000.00 License Deposit be forfeited to the Receiver General of Canada.

On March 6, 2013, the Board notified the Applicant of its decision and order stating as follows: Pursuant to subsection 126(2) of the Federal Accord Act (subsection 125(2) of the Provincial Accord Act) the Board has decided to cancel EL 2420 because the interest owner has failed to meet the requirements of

section 4(

b) and 5(

a) of EL 2420 (i.e. failed to post with the Board the required $32,250,000.00 Work Deposit). In making its decision, the Board was of the opinion that not cancelling EL 2420 would: • Lead to similar request from other license holders, to which, on the basis of consistency, the Board would have to accede; • Undermine confidence in the land tenure system; and • Impede the exploration of petroleum in the Nova Scotia Offshore Area. Enclosed is a copy of the Cancellation Order for LE 2420, dated March 5, 2013, and recorded in the Registry System as Notice 9209.

The $50,000.00 License Deposit has been forfeited to the Receiver General of Canada. The Issues [ 32 ] Based on that record, the Notice of Judicial Review requires the Court to answer two questions: Question #1 : What is the standard of review? Question #2 : What is the result of application of the standard of review to the facts of this case? The Analysis Question #1: What is the standard of judicial review? [ 33 ] The proper approach to determining the standard of review is set out in Dunsmuir v New Brunswick , 2008 SCC 9 .

The standard in that decision was recently summarized in Agraira v Canada , 2013 SCC 36 , at para 48 : [48] As this Court held in Dunsmuir , a court deciding an application for judicial review must engage in a two-step process to identify the proper standard of review. First, it must consider whether the level of deference to be accorded with regard to the type of question raised on the application has been established satisfactorily in the jurisprudence.

The second inquiry becomes relevant if the first is unfruitful or if the relevant precedents appear to be inconsistent with recent developments in the common law principles of judicial review. At this second stage, the court performs a full analysis in order to determine what the applicable standard is. [ 34 ] So the first question in identifying the proper standard of review; that is, the level of deference applicable to the question, is whether it has been satisfactorily established in prior court decisions.

[ 35 ] The only similar case to this matrix appears to be Hibernia Management and Development Company Ltd v Canada- Newfoundland and Labrador Offshore Petroleum Board , 2008 NLCA 46 (“Hibernia”) . The Newfoundland Court of Appeal considered a similar statutory scheme or regime to that applicable to this case and concluded that the standard of review, applying the Dunsmuir approach, was the standard of reasonableness. [ 36 ] The Board acknowledges, and I agree, that one decision of an appellate court of another jurisdiction is not sufficient to satisfy the determination of the standard of review in this case.

Certainly the decision of that court is helpful in the analysis this Court must perform. I therefore undertake the second of the two-step process to identify the proper standard of review. [ 37 ] The Dunsmuir approach was clarified in Alberta v Alberta Teachers’ Association , 2011 SCC 61 , in particular, paras 30 and 39. Deference will usually result where the tribunal is interpreting its home statute. [ 38 ] This principle applies unless the

interpretation of the home statute falls into one of the categories of questions to which the correctness standard continues to apply; that is, constitutional questions, questions of law that are of general importance to the legal system as a whole and that are outside the adjudicator’s expertise, questions regarding the jurisdictional lines between two or more competing specialized tribunals, and true questions of jurisdiction. True questions of jurisdiction are narrow and exceptional.

When considering the decision of an administrative tribunal interpreting or applying its home statute, it should be presumed that the appropriate standard of review is reasonableness. [ 39 ] I agree with the Board that the questions decided by it in this case were questions concerning the application of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act passed by the Parliament of Canada (“ Federal Act ”) and the equivalent Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act passed by the legislature of Nova Scotia (“ Nova Scotia Act ”), and involve the exercise of discretion by the Board. [ 40 ] The presumption follows consideration of the relevant contextual factors, summarized in Police Association of Nova Scotia Pension Plan v Amherst , 2008 NSCA 74 , at paragraph 42 , where the Court outlines the factors to select the standard of review by asking three questions: 1.

Does a privative clause give statutory direction indicating deference? 2. Is there a discrete administrative regime for which the decision maker has particular expertise? 3. What is the nature of the question? First Contextual Question: Does a privative clause give statutory direction indicating deference? [ 41 ] Both the Federal and Nova Scotia Acts contemplate judicial review of a decision of the Board to cancel rights granted by an exploration license. Section 127(11) of the Federal Act reads: 127

(11) Any order, decision or action in respect of which a hearing is held under this

section is subject to review and to be set aside by the Supreme Court of Nova Scotia in accordance with the practice and procedure established by or pursuant to the Provincial Act. (See also Section 126(11) of the Nova Scotia Act ) [ 42 ] At the same time,

Section 31 of the Federal Act (and equivalent

section of the Nova Scotia Act ) provides that the Board’s decisions are final: 31. Subject to this Act , the exercise of a power or the performance of a duty by the Board pursuant to this Act is final and not subject to the review or approval of either government or either Minister. [ 43 ]

Section 149 of the Federal Act (s. 142 of the Nova Scotia Act ) provides a degree of privative protection to determinations of the Committee.

Section 149(3) reads: 149(3) The finding or determination of the Committee on any question of fact within its jurisdiction is binding and conclusive. [ 44 ] It is noteworthy that in the Hibernia decision, the Court concluded that a provision in the governing statute, the same as s. 31 in the Federal and Nova Scotia Acts , should be characterized “as at least a partial privative clause”. [ 45 ] The decision of the Board accepting the recommendation of the Committee was primarily factual.

Both the Committee and the Board had to conclude that the Applicant had failed to comply with its License by failing to post the required Work Deposit, and also concluded that if the License was not cancelled, this would impede the exploration of petroleum in the Nova Scotia Offshore Area. By

Section 149 of the Federal Act (s. 142 of the Nova Scotia Act ), these factual conclusions are “binding and conclusive”. [ 46 ] While both the Federal and Nova Scotia Acts indicate that cancellation decisions are subject to judicial review, I conclude that the privative clauses in the legislation suggest that deference is owed to the Committee and the Board with respect to their determinations. Second Contextual Question: Is there a discrete administrative regime for which the decision maker has particular expertise? [ 47 ] This too involves consideration of both the Federal and Nova Scotia Acts .

They create a regime by which the Board has specialized expertise. In this case, the Board was interpreting and applying its home statutes. It did not decide questions of law of central importance to the legal system or outside its specialized expertise. [ 48 ] The purpose of both Acts is to implement the Canada-Nova Scotia Offshore Petroleum Resources Accord.

One of the objectives of the Accord includes achieving the early development of petroleum resources in the offshore area for the benefit of Canada as a whole, and Nova Scotia in particular, as well as ensuring the continuance of a stable, offshore administrative regime for the industry,

consistent, insofar as is appropriate, with regimes established for other offshore areas in Canada. [ 49 ] To achieve these purposes, regulation of the Nova Scotia offshore petroleum resources was delegated to the Board. The functions of the Board are set out in s. 18(1) of both Acts .

Those sections provide that the Board shall, in addition to its duties and function imposed by the legislation, perform such duties and functions as are conferred or imposed on it by the Accord. [ 50 ] Under the legislation, the Board manages Nova Scotia offshore petroleum exploration and development, including the granting and cancellation of exploration licenses. What is conferred by exploration licenses is described in s. 68 of the Federal Act (s. 71 of the Nova Scotia Act ). [ 51 ] Exploration licenses are issued after a public call for bids (s. 61(4) of the Federal Act and s. 64(4) of the Nova Scotia Act ).

A call for bids must include: (1) the terms and conditions, subject to which the interest is to be issued; (2) the forms of bids; and, (3) the criteria that the Board shall apply in assessing bids. [ 52 ] Section 70(1) of the Federal Act and s. 73(1) of the Nova Scotia Act provide that exploration licenses shall contain terms and conditions, as may be prescribed, and, in addition, as may be agreed between the Board and the interest owner of the license. [ 53 ]

Section 126 of the Federal Act (s. 125 of the Nova Scotia Act ) provides for the cancellation of licenses. The Board may only cancel licenses after giving notice to the interest owner, requiring compliance with the terms and conditions of the license within 90 days. When the Board gives notice of a proposed cancellation, the affected party may request a hearing by the Committee.

After the hearing, the Committee makes recommendations to the Board and the Board is required to consider the recommendations of the Committee (s. 127 of the Federal Act and s. 120 of the Nova Scotia Act ). [ 54 ] The Committee functions independent of the Board and includes persons with specialized, expert or technical knowledge of petroleum issues. (See ss. 145 and 146 of the Federal Act ) [ 55 ] A similar scheme was considered in Hibernia .

The Court concluded that a reasonableness standard of review should be applied to decisions of the Board under that statute. (See: paras 53 to 55) Leave to appeal to the Supreme Court of Canada was dismissed. [ 56 ] I conclude that Parliament of Canada and the Nova Scotia legislature have created a discrete administrative regime, with administrative and technical expertise, together with a broad mandate to manage the development of Nova Scotia’s offshore petroleum resources.

The Board is mandated to grant and cancel exploration licenses to further the purposes of the Accord as well as the Federal and Nova Scotia Acts . The administration of the Acts involves public policy, and the legislation anticipates that the Board will exercise significant expertise in that administration. [ 57 ] With respect to the second contextual question, the legislative scheme supports deference to the decisions of the Board and the determinations of the Committee.

Third Contextual Question: What is the nature of the question? [ 58 ] Three questions were considered in the process that led to the cancellation of the Applicant’s License: I Whether the Applicant failed to comply with the requirements of its License; II Whether that failure to comply warranted cancellation; and, III Whether the Committee had a mandate to consider the decisions of the Board not to extend the time for the Applicant to file its Work Deposit. [ 59 ] The first question is entirely a question of fact. [ 60 ] The second question is a question of both fact and policy. [ 61 ] The third question is a question of the

interpretation and application of the legislation. This involves questions of law, but the questions of the law relate to the home statute of the Board and the Committee, and not questions of law of central importance to the legal system as a whole or questions upon which the Board and the Committee had no expertise. [ 62 ] When the Committee dealt with the question of whether it could consider the decisions of the Board refusing to extend the time for the Applicant to file a Work Deposit, as questions of jurisdiction, they were not in fact questions of jurisdiction but questions of law.

For this I rely upon the analysis in Coates v Nova Scotia , 2013 NSCA 52 , paragraphs 43 to 45 . [ 63 ] In

summary, the questions subject to this judicial review are questions upon which the Board should be granted deference. [ 64 ] I conclude that the standard of review of the Board’s decision in this matter is reasonableness. This is a case of a regulatory body interpreting and applying its home statute. The Federal and Nova Scotia Acts create a discrete administrative regime in which the Board has specialized expertise. [ 65 ] The questions dealt with by the Board’s decision in this case engaged that specialized expertise. The questions involved in this case are questions of fact and policy, as well as the

interpretation and application of the Board’s home statute. There is a

presumption that reasonableness is the applicable standard of review. All of the contextual factors suggest deference on an application for judicial review of the Board’s decision to cancel the Applicant’s License. [ 66 ] Having determined that the standard of review is reasonableness, the second and final question that the Court has to decide is whether the decision of the Board to cancel the License was reasonable.

Question #2: Was the decision of the Board, cancelling the License, reasonable? [ 67 ] In Coates v Nova Scotia , paragraphs 46 and 57 , the Nova Scotia Court of Appeal reviewed the meaning of reasonableness as determined in Newfoundland and Labrador Nurses’ Union v Newfoundland and Labrador , 2011 SCC 62 . I apply that analysis to the decision in this case. [ 68 ] The Board notified the Applicant on March 6, 2013, that it had cancelled the License and provided clear reasons.

The Board’s reasons are consistent with the report of the Committee, made January 25, 2013, and its recommendations that the Board proceed with the cancellation.

The Report of the Committee included determination of facts and policy recommendations with respect to the breach of the terms of the License. [ 69 ] The reasoning of the Committee is clear, both as to the requirements of the License and the failure of the Applicant to post the Work Deposit required by the License. [ 70 ] On the policy issue as to whether the Applicant’s failure to comply with the License warranted cancellation, the Committee’s reasoning shows that it was concerned about requiring a license holder to adhere to the terms of the license, failing which it would impair the development of the offshore petroleum resources. [ 71 ] The Committee report went on to consider the applicable legislation and the objectives of the Board. [ 72 ] The report of the Committee considered whether it would be fair to other bidders to allow the Applicant to change the terms of the License after the fact. [ 73 ] The factual and policy determinations of the Committee are understandable; meet the requirements of legitimacy and transparency, and fall within the range of reasonable outcomes based on the facts and the law. [ 74 ] The decision of the Board to cancel the Applicant’s License, as communicated in its March 6, 2013, letter, reflects the obligation of the Board to consider the recommendations of the Committee and the binding effect of the determinations of fact by the Committee. [ 75 ] The Board’s March 6, 2013, letter indicates its opinion that not cancelling the Applicant’s License would lead to similar requests by other license holder, to which, on the basis of consistency, the Board would have to accede, thereby undermining confidence in the land tenure system and impeding the exploration of petroleum in the Nova Scotia Offshore Area. [ 76 ] This directly reflected the factual determinations of the Committee and its assessment of the policy considerations flowing from the failure of the Applicant to comply with the terms of the License. [ 77 ] I conclude that the Board’s reasoning is transparent and justifiable on the facts and the law.

It falls within the range of reasonable outcomes and is therefore reasonable. The application for judicial review is dismissed. Warner, J.